After a rough start to this shortened trading week, major indexes weathered the storm to close out the week on a positive note. The S&P 500 gained 0.53%, while the Dow Jones experienced a 52 point rise to put the index above the 12,500 level today. On the commodity side, a weakness in the dollar saw oil move above $112 per barrel, while gold, still sitting at its historic high, settled above $1,500 per ounce. The positive day was fueled by strong earnings from some of the nation’s largest companies. Though individual shares did poorly in trading, General Electric (GE) reported a jump in profit of nearly 80% an in increase in its dividend, while other bellwethers like Apple (AAPL) shattered The Street’s predictions. On the other end of the spectrum, major airlines reported poorly as rising fuel prices have lobbed off profits for companies like United Airlines.
One of the biggest ETF losers on the day was the iPath S&P 500 VIX Short-Term Futures ETN (VXX), which declined by 3.0% in Thursday trading. This fear-based investment product has taken a hit all week, since jumping big on Monday due to an S&P downgrade of U.S. debts. But now that strong earnings have started to flow in, markets have recoiled, bringing this fund down for yet another trading day this week. Though numerous individual firms sank on their respective earnings reports, companies like GE and McDonald’s reported strong jumps in profit, spurning investor confidence in the overall economy. VXX’s poor trading week as a whole may point to stronger faith in the markets, as this “fear index” fund has failed to provide its investors with strong gains for the past few days [see also VXX fundamentals].
One of the biggest winners on the day, was the United States Natural Gas Fund (UNG), which soared higher by 2.6% in the session. While severe storms have been helping this fund stay in the green all week, it was a supply report that pushed this volatile product forward today. Natural gas futures hit an 11 week high today, amid stockpiles that were lower than expectations. The Energy Information Administration said that domestic natural gas supplies raised by only 47 billion cubic feet last week; analysts had expected that figure to be at least 51-bcf. Tim Evans, an analyst with Citi Futures Perspective, noted that “an unusually large amount of nuclear-power generation was out of service for maintenance and refueling last week, likely increasing demand for natural gas. Natural gas-fired power stations are typically called upon to meet the added demand when nuclear plants are taken offline.” [see also UNG charts]
Disclosure: No positions at time of writing.